California mulls deeper cuts to power sector GHGs

California mulls deeper cuts to power sector GHGs

Houston, 23 August (Argus) — California regulators may require the state’s utilities to make deeper cuts in their greenhouse gas (GHG) emissions.

An administrative law judge for the California Public Utilities Commission (CPUC) has recommended requiring the electric utilities and suppliers to lower their emissions to 38mn metric tonnes by the end of the decade. That would go beyond a 46mn t target the CPUC set last year and would represent a roughly two-thirds reduction in electricity sector emissions compared with 1990 levels.

Adopting the more aggressive target would result in a “modest cost difference” and is needed to keep the state on track to meet its mandate to reduce economywide GHGs by 40pc from 1990 levels by 2030 and its goal of carbon neutrality by 2045, CPUC administrative law judge Julie Fitch said on 17 August.

If the CPUC implements the 38mn t limit, electricity suppliers would have to adjust their long-term planning to ensure they can meet the new benchmarks.

Fitch said the new target would force the power sector “toward planning for a higher electrification future, which may be prudent given the importance of electrification for meeting the state’s climate goals.”

The target could result in a state grid that uses renewable portfolio standard (RPS) resources for 74pc of its electricity early in the next decade, and 87pc GHG-free generation overall, according to an analysis cited by Fitch.

California’s RPS requires utilities to use resources like solar and wind for 60pc of their retail sales by 2030, clearing the path for a broader 100pc zero-carbon power sector by 2045. Category 1 resources, which feed directly into the state’s grid, must account for 75pc of the renewable energy certificates (RECs) used for compliance with the former program.

Electricity suppliers also participate in the state’s cap-and-trade program, which is geared to help meet the 40pc by 2030 economywide target.

The recommendation follows the CPUC’s review of 44 integrated resource plans, documents filed by utilities as roadmaps detailing how they plan to meet electricity demand in coming years.

Fitch said those plans fall short of what is needed to meet the state’s GHG targets, but she also found that recent steps, including a CPUC directive for load-serving entities to procure 11,500MW of clean energy resources, would “largely” make up the gap.

Meeting the 38mn t target would require an additional 5,400MW of clean energy capacity by 2030 beyond what is needed for the GHG target adopted last year, Fitch said.

Southern California Edison (SCE), one of the state’s investor-owned utilities, applauded Fitch’s conclusion that a lower emission target is needed for the state to meet its decarbonization goals.

“The 2030 and 2045 goals are feasible but will require a significant restructuring in the state’s energy mix, with a clean electric grid serving as a foundation for powering this decarbonized future,” SCE Said.

California’s other two investor-owned utilities – Pacific Gas and Electric and San Diego Gas and Electric – did not immediately return requests for comment.

The CPUC is taking comments on the proposal until 27 September, and stakeholders can respond to one another’s feedback until 11 October.

By Patrick Zemanek

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